Insurance-linked securities funds deliver solid 1.58% return for August 2025: ILS Advisers

The insurance-linked securities (ILS) fund sector delivered another solid month of investment returns in August 2025 according to the ILS Advisers Fund Index, with the average ILS fund return across the index constituents reaching 1.58% for the month, the strongest month of this year so far and second best August ever.

Investors in the insurance-linked securities (ILS) market continued to enjoy strong performance of their investments in August 2025, with both pure catastrophe bond and private ILS funds reporting strong returns.

Once again there were no significant catastrophe losses that affected ILS fund strategies in August, helping the average performance across all of the 32 constituent funds (out of 36) that have reported their returns for the month so far reach 1.58%, according to ILS Advisers. That’s the second-highest August return in the history of this index after last year’s.

Which takes the year-to-date (to end of August) average return for 2025 across the ILS funds in this index to 5.24%.

It’s worth noting that, while this is only the sixth best performance for the first-nine months of the year for this index, had it not been for the wildfire impacts in California in January, the average ILS fund return to the end of September 2025 could have been the third highest ever seen.

The private ILS funds, which allocate to a range of ILS assets including collateralized reinsurance and retrocession opportunities experienced the strongest performance in August, averaging 1.78% across those that have reported their returns for the month so far.

The pure catastrophe bond fund group reported an average return of 1.43%, the best month of the year so far for the pure cat bond fund strategies.

For the private ILS funds, the August figure is slightly behind July’s 1.86%, but with some funds still to report their average could rise once all returns are in.

Also notable for the private ILS funds, is the fact the 1.78% average for August 2025 is the same as was reported for the same month in the prior year, at the time the data was released.

Pure cat bond funds are slightly down on the prior year, reflecting the tighter spread and softer reinsurance pricing environment.

All 32 of the ILS funds that have reported their August 2025 returns to ILS Advisers so far were positive for the month.

The worst performing fund delivered a 1.04% return for the month, while the best performing delivered a 2.70% return, demonstrating once again the range and diversity of strategies on offer in the ILS fund market.

With September almost over and no impactful catastrophe events again, the market is now on-track for another strong month of performance, with seasonal premium accruals again likely to drive solid returns for ILS funds.

You can track the ILS Advisers Fund Index here on Artemis. It comprises an equally weighted index of 36 constituent insurance-linked investment funds which tracks their performance and is the first benchmark that allows a comparison between different insurance-linked securities fund managers in the ILS, reinsurance-linked and catastrophe bond investment space.